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Governor Scott Walker Directs Department Of Health Services To Increase Fraud Prevention In State's Public Assistance Programs

Press Release

Location: Madison, WI

Governor Scott Walker today directed the Department of Health Services (DHS) to evaluate and implement six strategies strengthening the state's public assistance programs by increasing fraud prevention and giving DHS access to more information that it can use to verify individuals and families are eligible for public assistance benefits.

"Our job in tracking and preventing fraud in Wisconsin's public assistance programs is never done," said Governor Walker. "Today, I'm announcing a series of six fraud prevention strategies that the Department of Health Services will evaluate and implement in order to renew our investment in protecting taxpayer dollars and make sure only those who are truly eligible are receiving benefits and services through the state's public assistance programs. Our public assistance programs are a safety net for individuals and families in need, and in order to keep these programs viable and sustainable over the long-term, the integrity of these programs must be maintained."

"One of the Department's top priorities is to make sure we are providing essential safety net benefits, like BadgerCare Plus and FoodShare to individuals and families in poverty while ensuring Wisconsin's valuable taxpayer dollars are being spent in the most efficient, effective way possible," said DHS Secretary Kitty Rhoades. "The Department's leadership team, along with our Office of the Inspector General, will implement the Governor's recommendations, where possible, through changes to administrative code, and for any changes that require statutory changes or amendments to existing waivers with the federal government, we will partner with the federal government and members of the our local legislature to make these changes."

Governor Walker's six strategies for increasing fraud prevention and detection include:

Strategy One: Pilot a front-end verification project at Milwaukee Enrollment Services (MilES) to review all applications in which an applicant indicates a household member is self-employed to determine if any additional proof is needed before the case is fully processed.

Strategy Two: Develop an Error Prone Profile module for the Department's public assistance eligibility determination, CARES, that will identify at the time of application cases that need further verification or additional investigation before the case can be fully processed. Wisconsin's SeniorCare Program has an Error Prone Profile established that has been successful in flagging cases that need additional review.

Strategy Three: Require all BadgerCare Plus and FoodShare members and applicants, who indicate they have self-employment income, to submit their tax returns for income verification or sign IRS form 4506-T that will give the Department permission to request a transcript of the individual or family's tax return to verify the income the individual or family reported to the IRS. Current program guidelines do not require self-employed applicants or members to submit a tax return for a business, if it has been established for less than six months. Implementing this option would require self-employed applicants or members to submit tax returns at application, renewal, or when there has been a significant change in circumstances, regardless of how long the business has been established.

Strategy Four: Evaluate and implement additional data exchanges to maximize the information that individuals provide to all State agencies. The Department would evaluate connecting the Department's public assistance eligibility determination system, CARES, to databases maintained by the Register of Deeds, Department of Revenue, Department of Workforce Development, Department of Veterans Affairs, Department of Transportation, Department of Financial Institutions, Department of Administration, and the Department of Natural Resources.

Strategy Five: Create a Recipient Fraud and Abuse Prevention Task Force to include the Department of Health Services, Department of Children and Families, Wisconsin Department of Justice and other state, federal, and local representatives. The structure of this task force would be similar to the Health Care Fraud Task Force that is convened by the United States Attorneys and the Nursing Home Fraud and Abuse Task Force.

Strategy Six: Require an asset test -- property, liquid assets, and vehicles -- for FoodShare applicants and members. The Department will not be able to require the asset test for BadgerCare Plus members because under federal rules related to the Affordable Care Act, states cannot test the assets of non-elderly, non-disabled Medicaid members.

Implementation of the verification enhancements for public assistance programs may require a waiver from USDA Food & Nutrition Service (FNS) and the Centers for Medicare & Medicaid Services (CMS). DHS will provide an update quarterly about its progress in implementing Governor Walker's recommendations in the Department's Quarterly Report to the Joint Committee on Finance.

While the DHS moves forward with implementing the Governor's fraud reduction and prevention recommendations, it will also be evaluating additional options for fraud detection and prevention as the Department works to comply with requirements of the federal Affordable Care Act.

One of Governor Walker's top priorities since taking office in 2011 has been preventing waste, fraud, and abuse of taxpayer dollars. In October 2011, Governor Walker created the Office of the Inspector General (OIG) at the Department of Health Services to consolidate and improve the DHS's public assistance program integrity and fraud prevention efforts. When Governor Walker took office in 2011, there was one individual at the state level, who was responsible for monitoring and tracking recipient Medicaid and FoodShare fraud.

In his 2011-2013 biennial budget, Governor Walker and the Legislature built the necessary infrastructure to create the Office of the Inspector General and is now a dedicated office within DHS that has more than 90 employees who monitor and audit providers who participate in Wisconsin Medicaid; monitor, investigate, and refer recipient and retailer fraud allegations; oversee and enforce the prior authorization policies of the state's Medical Assistance program; and perform independent, objective assurance, and consulting engagements for DHS programs and operations.

The DHS Office of Inspector General (OIG) has collected or avoided nearly $8 million in public assistance recipient fraud in the first half of 2013. In 2012, the OIG collected or avoided $12.3 million and had a return of $23 for every dollar invested. In 2012, The OIG also has completed more than 2,500 FoodShare investigations in 2013. In 2012, the investigation total was more than 4,200.

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